Today, your dream car costs $61,100. You feel that the price of the car will increase at an annual rate 2.1 percent. If you plan to wait 5 years to buy the car, how much will it cost at that time?

Answer: $67,515.50

Explanation:

Given dа ta:

Cost of car = $61,100

Annual increase in rate = 2.1%

Waiting duration = 5 years

Therefore:

Increase in Cost of car when waiting for 1 year

= interest of 1year + Original cost

= $61,100 * 0.021 + $61,100

= $1283.1 + $61,100

= $62,383.1

Increase in cost of car when waiting for 5 years before purchase

= Increases in rate + Original cost

= 0.021 * 5 * $61,100 + $61,100

= $6,415.5 + $61,100

= $67,515.5

After 5 years the car would cost approximately $67,515.50